EUROMED, INC.
8214 WESTCHESTER SUITE 500
DALLAS, TEXAS 75225
214-692-3544
214-987-2091
December 01, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: John L. Krug
Mail Stop 7-6
Re: EuroMed, Inc.
Dear Mr. Krug:
On behalf of EuroMed, Inc. I hereby transmitt the 10k for the period
end 03/31/98.
Best Regards,
Elbert G. Tindell
Chairman of the Board
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______________ TO __________
EUROMED, INC.
(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER 0-27720
<TABLE>
<S> <C>
NEVADA 88-0317700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8214 Westchester, Suite 500
DALLAS, TX 75225
(Address of principal executive offices) (Zip Code)
</TABLE>
(214) 220-0693
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
As of December 01, 1998, there were 1,407,000 shares outstanding of the
registrant's common stock, $0.01 par value.
- ---------------------------------------------------------
<PAGE>
INDEX
PART I. FINANCIAL INFORMATION
PAGE NO.
--------------
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED):
Balance Sheets -
December 31, 1996 and March 31, 1998 3
Statements of Operations -
Three months ended March 31, 1997 and 1998 4
Statements of Cash Flows -
Three months ended March 31, 1997 and 1998 5
Notes to Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS7
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
<PAGE>
EUROMED, INC.
BALANCE SHEETS
<TABLE>
<S> <C> <C>
December 31, March 31,
1997 1998
(Unaudited)
ASSETS
Current Assets
Cash $ 232,170 $ 786,828
Receivables -
Proceeds from sale of subsidiary 670,000 -
Due from EuroMed Europe, B.V. 300,000 300,000
Prepaid Expense -- 6,000
---------------- ------------
TOTAL CURRENT ASSETS 1,202,170 1,092,828
--------- ----------
TOTAL ASSETS $1,202,170 $1,092,828
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 88,223 $ 57,000
----------- -----------
TOTAL CURRENT LIABILITIES 88,223 57,000
-----------
Stockholders' Equity
Common Stock, par value $.01 per share;
20,000,000 shares authorized; 1,430,000
shares issued and outstanding 14,300 14,300
Additional paid-in capital 10,167,138 10,167,138
Retained (deficit) (8,935,241) (9,013,360)
---------- ----------
1,246,197 1,168,078
Less: 23,000 Treasury Shares, at cost (132,250) (132,250)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 1,113,947 1,035,828
----------- ----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,202,170 $1,092,828
=========== ==========
</TABLE>
See accompanying notes to
financial statements.
<PAGE>
EUROMED, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<S> <C> <C>
Three months ended
March 31, March 31,
1997 1998
--------- ---------
Sales $ - $ -
Cost of goods sold - -
------------- ------------
Gross profit - -
Selling, general and administrative expenses 266,112 78,119
--------- ---------
Operating (Loss) (266,112) (78,119)
Income tax (expense) benefit - -
--------------- --------------
(Loss) from continuing operations (266,112) (78,119)
Discontinued operations:
Loss from discontinued operations (65,242) -
Estimated loss on disposal of
discontinued operations - -
-------------- --------------
Net (loss) $(331,354) $ (78,119)
========= =========
Weighted Average Number of
Common Shares Outstanding 4,000,000 1,430,000
========= ==========
(Loss) per share:
Continuing operations $ (.07) $ (.05)
Discontinued operations -
Loss on operations (.01) -
Estimated loss on disposal of
discontinued operations - -
-------------- --------------
Total $ (.08) $ (.05)
=========== ===========
</TABLE>
See accompanying notes to consolidated
financial statements.
<PAGE>
EUROMED, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended
March 31, March 31,
1997 1998
------------ --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) from continuing operations $ (266,112) $ (78,119)
Changes in operating assets and liabilities:
Prepaid expenses (62,644) (6,000)
Accounts payable and accrued liabilities 54,166 (31,223)
----------- ---------
Net cash (used in) continuing operations (274,590) (115,342)
---------- ---------
Net cash provided by discontinued operations 265,602 -
---------- ---------------
Net cash (used in) operating activities (8,988) (115,342)
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposal of subsidiary - 670,000
--------------- --------
Net increase (decrease) in cash and cash equivalents (8,988) 554,658
Cash and cash equivalents
at the beginning of the quarter 26,757 232,170
----------- ---------
Cash and cash equivalents
at the end of the quarter $ 17,769 $ 786,828
=========== =========
Cash paid during the quarter:
Interest $ - $ -
Income taxes - -
</TABLE>
See accompanying notes to
financial statements.
<PAGE>
EUROMED, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
a. Interim Financial Statements
The consolidated financial information for the interim periods presented herein
has not been audited by independent accountants, but in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the condensed consolidated balance sheets
and the condensed consolidated statements of earnings and cash flows at the
dates and for the periods indicated have been made. Results of operations for
interim periods are not necessarily indicative of results of operations for the
respective full years.
b. Description of business
EuroMed had no business operations from November 1997 to March 31, 1998. The
expenses incurred are directors' fees and other general expenses required to
maintain the corporate shell. The Board of Directors is currently searching for
appropriate business acquisitions.
c. Earnings Per Share
Net (loss) per share is computed on the weighted average number of shares
outstanding during the period; however, the net (loss) per share computations do
not include the exercise of the outstanding stock warrants due to the
antidilutive effect.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
GENERAL
Swiss Nassau Corporation was incorporated on May 17, 1994 in the state of
Nevada, United States of America, with authorized and issued share capital of
1,000 shares of common stock with no par value (the "Common Stock). On June 15,
1994, computer equipment with estimated value of $4,998 was contributed in
exchange for all of the shares of Swiss Nassau Corporation. On October 20, 1995,
Swiss Nassau Corporation changed its name into EuroMed, Inc. ("EuroMed" or the
"Company") and increased its authorized shares to 20,000,000 shares of Common
Stock with a new par value of $0.01 per share, and 5,000,000 preferred shares
with a par value of $0.01 per share. On October 20, 1995, EuroMed, Inc. effected
a 150 for 1 stock split of its Common Stock.
On November 17, 1995, all of the shares of Galenica B.V. ("Galenica") and
Confedera B.V. ("Confedera"), both based in Oosterhout, the Netherlands, were
exchanged by the ultimate shareholder of both companies for all of the shares of
a newly-formed company, EuroMed Europe B.V. ("EuroMed Europe"). Prior to this
transaction Galenica and Confedera were owned by B.V. Wisteria ("Wisteria"), a
Netherlands limited liability company, which is owned by Pantapharma B.V., which
is owned by A. Francois Hinnen. All of the shares of EuroMed Europe were then
exchanged for 1,850,000 shares of Common Stock. Neither EuroMed Europe nor the
Company had any operations, and these transactions were completed in
contemplation of an initial public offering ("IPO") of shares of EuroMed. In
March 1996 EuroMed completed its IPO by selling 1,150,000 shares of its common
stock at $6.50 per share. The proceeds of the IPO and 850,000 shares of its
common stock were used to acquire Mutarestes B.V. and Subsidiary ("Mutarestes")
in July 1996 (estimated acquisition price of $11,729,500). Almost immediately,
upon completion of the acquisition of Mutarestes, differences developed between
various officers, directors and shareholders. Mutarestes was subsequently sold
in July 1997 with a significant loss being recognized and the 850,000 shares of
common stock being returned to the Company. In addition, A. Francois Hinnen
returned 850,000 shares of common stock to the Company to mitigate the effect of
the loss on the Mutarestes transactions.
As a result of the failed acquisition of Mutarestes and a significant change in
the Dutch law as it related to the wholesale price of pharmaceuticals, the Board
of Directors concluded that it was in the best interest of EuroMed to divest
itself of its remaining Dutch pharmaceutical operations. In November 1997,
EuroMed Europe and its subsidiaries were sold. EuroMed recognized a substantial
loss on the disposal of EuroMed Europe; therefore, the Board of Directors
negotiated with A. Francois Hinnen the return of 1,000,000 shares of EuroMed's
common stock to lessen the effects of the loss on disposal for the remaining
shareholders.
EuroMed currently has no business operations; however, its President and Board
of Directors are actively seeking appropriate business acquisitions.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31, 1997
As of March 31, 1998 the Company had no sales. Selling, general and
administrative expenses for the three months ended March 31, 1998 were $78,119
and were comprised primarily of directors' fees, and legal fees and professional
fees incurred as part of the legal proceeding described in Part II, Item 1,
Legal Proceedings.
Selling, general and administrative expenses for the three months ended March
31, 1997 were $266,112 and were comprised primarily of legal and accounting
expenses incurred in connection with the Company's divestiture of its Pluripharm
Division; professional fees for the recurring public reporting and continuing
legal and account fees related to ongoing litigation; and ongoing auditing
costs.
LIQUIDITY AND CAPITAL RESOURCES
Cash (used in) operations was $(115,342) for the three months ended March 31,
1998 compared with $(8,988) provided by operations for the three months ended
March 31, 1997. The cash used in operations was offset partially by advances
from the discontinued operations in 1996.
Cash and cash equivalents at the end of the three months ended March 31, 1998
was $768,828 compared with $17,769 at the end of three months ended March 31,
1997. Management is of the opinion that the proceeds from the sale of the
discontinued operations, should be sufficient to finance and sustain operations
at the present level for at least twelve months.
<PAGE>
PART II
Item I. Legal Proceedings
The Company is still involved in three legal proceedings, two in Nevada State
Court and one in the United States District Court for the Northern District of
Texas. There has been no substantive activity in the past three months in the
first Nevada suit filed by the Company against former directors Gregory Alan
Gaylor and Robert Jansonius.
The second legal proceeding is a lawsuit filed by the Company in the United
States District Court for the Northern District of Texas against Gaylor in which
a Final Judgment in the total amount of approximately $16 million was awarded in
favor of the Company against Gaylor. The Final Judgment also permanently
prohibits Gaylor from violating federal securities laws. On January 18, 1998,
the Company initiated contempt proceedings against Gaylor and Jan Bouwman
(another former Company Director) arising from their deliberate failure to
comply with federal securities laws, and the Final Judgment, by wrongfully
soliciting proxies from the Company's shareholders. On March 10, 1998, the U.S.
District Court issued an order holding Gaylor and Bouwman in contempt of court
for, among other reasons, their failure to file a Schedule 13(d) after acquiring
a beneficial ownership of more than 5% of the Company's shares, their
intentional misrepresentations in soliciting the voting proxies from the Company
shareholders, and their solicitation of proxies in violation of Section 14 of
the Securities Exchange Act of 1934 with respect to their Nevada lawsuit against
the Company, described below. As sanctions for their contempt, Gaylor and
Bouwman were ordered to disclaim all proxies in the Company's stock that they
obtained prior to March 10, 1998, which Gaylor and Bouwman did on March 23,
1998. As further sanctions, Gaylor and Bouwman were prohibited from soliciting
any further proxies without first complying with the Final Judgment and federal
securities laws. On March 23, 1998, Gaylor filed a notice of appeal, indicating
his intention to appeal the U.S. District Court's contempt order.
The third legal proceeding is a Nevada lawsuit filed by Gaylor and Bouwman,
on behalf of themselves and the Company's minority shareholders, against the
Company in which a special master was appointed, with the Company's agreement,
to investigate Gaylor and Bouwman's allegations against the Company. The special
master has not issued his report as of yet.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Number and Description of Exhibit
Number Exhibit Description
2.1 Stock Exchange Agreement, dated as of November 17, 1995, by and
between Registrant and B.V. Wisteria.(1)
2.2 Ratification Agreement.(1)
3.1 Restated Articles of Incorporation of the Registrant.(1)
3.2 Bylaws of the Registrant.(1)
4.1 Specimen Common Stock Certificate.(1)
27.1 Financial Data Schedule.(*)
* Filed herewith.
(1) Previously filed as an Exhibit to the company's Registration
Statement No. 33-80805 on Form S-1 and incorporated by herein
reference.
(b) Reports of Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EuroMed, Inc.
Dated: December 1, 1998
<TABLE>
<S> <C>
Signature Title
/s/ Elbert G. Tindell President and
Elbert G. Tindell Chairman of the Board
/s/ Robert A. Shuey III Chief Executive Officer,
Robert A. Shuey, III Chief Financial Officer,
Treasurer and Director
</TABLE>
<PAGE>
Exhibit Index
Exhibit No. Description
27.1 Financial Data Schedule.(*)
(*) Filed herewith
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000852447
<NAME> EUROMED INC
<MULTIPLIER> 1
<CURRENCY> $US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JUN-1-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 786,828
<SECURITIES> 0
<RECEIVABLES> 300,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,092,828
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,086,828
<CURRENT-LIABILITIES> 57,000
<BONDS> 0
0
0
<COMMON> 14,300
<OTHER-SE> 1,021,528
<TOTAL-LIABILITY-AND-EQUITY> 1,092,828
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 78,119
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (78,119)
<INCOME-TAX> 0
<INCOME-CONTINUING> (78,119)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (78,119)
<EPS-PRIMARY> (0.05)
<EPS-DILUTED> (0.05)
</TABLE>
